Protests against Elon Musk and Tesla have been spreading globally, largely due to the CEO’s involvement in the Trump administration. These protests are now listed as an official “risk factor” in documents that Tesla is required to file with federal regulators.
The updated language in this filing, submitted to the Securities and Exchange Commission on Wednesday morning, indicates that the backlash against Musk has reached a level where Tesla’s legal team feels obligated to inform investors of potential risks to the company’s brand and business.
While risk factors are often broad and cautious, the introduction or removal of specific language can highlight issues or developments that are particularly significant to a company like Tesla, especially in the view of its legal department.
For several years, Tesla has included a risk factor cautioning investors that the company’s products, business, operational results, and the actions of Tesla and its management are subject to extensive scrutiny by various third parties. This factor previously warned that such criticism, which could be exaggerated or unfounded, might harm the business and complicate efforts to raise additional funds if necessary. This was according to the language in the company’s most recent annual report filed in January.
This language was amended on Wednesday.
Tesla has revised the risk factor language to now indicate that criticism “has incited protests, some escalating to violence targeting our operations, products, and personnel.” The company’s lawyers have also widened the scope of potential impacts, stating that negative perceptions arising from the protests, along with broader criticism of the company, “may harm our brand and our business (including sales) and make it more difficult to raise additional funds if needed.”
Despite Tesla’s implications in this newly updated language, there is no confirmed connection between the global protests against the company and isolated acts of vandalism at its showrooms and Supercharger stations. Additionally, Musk asserted during Tesla’s quarterly earnings call on Tuesday that the protesters are “paid,” although no evidence was provided to support this claim.
It has been evident that Musk’s actions could be adversely affecting Tesla; however, the extent of the damage caused by the protests has been difficult to determine.
The financial results released by Tesla on Tuesday revealed a notable decline in automotive revenue and profit year-over-year, clearly indicating some impact. Musk and other Tesla executives acknowledged that the protests were having a “negative impact.”
Wednesday’s SEC filing provides a clearer indication: the protests are significant enough for Tesla’s legal team to recognize them formally in writing. A spokesperson for Tesla Takedown, which has been instrumental in organizing protests worldwide, acknowledged the inclusion in the company’s risk factors as a victory.
“We couldn’t ask for a better endorsement of our movement than Tesla officially naming us as a risk factor. When the truth becomes a threat, you know you’re making an impact,” they stated in an email to TechCrunch. “The tremendous success of Tesla Takedown has created a powerful platform for broader impact.”
